What it takes to meet the basic requirements of most no credit auto loans
What we can tell you
Before filling out an application for terrible credit auto loans there are some basic requirements you should be aware of.
We are familiar with all of them because for over twenty years we?ve been associated with bad credit auto sales here at Auto Credit Express. A website we created shares our expertise on issues ranging from tote the note dealers to cosigning loans as well as today?s topic, the basics of poor credit car loans.
FICO scores
To start with, you should know your credit scores. Most bad credit lenders deal in the FICO score range of 500 to 640. Anything more than a 640 is typically considered near-prime, while prime starts around 720. Although nearly all bad credit lenders loan to near-prime customers, credit unions, captive finance companies and a few banks are noted for offering these customers better interest rates.
Secondly, you can?t be a credit ?ghost?. Lenders check how long you?ve been using credit. Unless you?re applying for a college grad program, having a credit history of at least 3 years is usually considered a minimum. An advantage is having at least one prior auto loan.
Income conditions
Monthly income requirements vary by lender, but a $1,500 to $1,800 gross income before taxes is typically the minimum needed to be considered. The higher your income, the larger your available selection of lenders (and cars) will usually be.
Lenders then total up your monthly debts, compare this to your income, and use this ratio to determine if you have enough income available to qualify for an auto loan plus car insurance.
Bad credit lenders also typically require that your total debt, including a car payment, not exceed 40% to 50% of your monthly gross income. In addition, most lenders prefer a monthly vehicle payment that?s less than 15% to 20% of your total income.
Down payment
Generally all bad credit lenders will require a down payment, either in cash or actual trade equity because customers with money invested tend to keep up with their monthly payments. A down payment of 10 percent is typically considered to be the minimum ? with larger down payments increasing the chances of a credit approval.
Vehicles
Most bad credit lenders will not let you to have more than one car payment at a time. If you are currently financing a car, usually you?ll need to either pay it off or trade it in. You also won?t be able to finance a commercial vehicle, conversion van, motor home or anything with a salvage, rebuilt or other type of branded title.
Other policies
??? ?Job time ? The longer the better. Short job time can be offset by situations such as higher income, employment in the same field, lengthy residence time or home ownership.
??? ?Bankruptcy ? Bad credit lenders will typically not finance individuals with open or multiple bankruptcies. Only a few will consider someone currently in an open Chapter 13 and, even then, will require an order to incur additional debt from the court before reviewing the application.
??? ?Accuracy ? Be prepared to back up application entries with proof. This is not the time to begin a career in ?creative writing?.
Where to begin
Auto Credit Express specializes in placing customers with bad car credit with dealers that can offer them their best chance at getting approved auto loans.
So if you?d like us to assist you in getting your auto credit back on track, you can begin now by filling out our online auto loans application.
Tags: approved auto loans, Bad Credit
Source: http://www.autocreditexpress.com/blog/2012/02/03/the-basics-of-approved-auto-loans/
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